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Part-time employees’ service cannot be discounted

February 07, 2018

Arbitrator departs from previous case to uphold rights of part-time employees

An arbitrator has held that the calculation of exit packages for part-time employees must fairly reflect their part-time status, and not apply a double discount that disproportionately devalues their service contribution.

Background

The central collective agreement between the Ontario Council of Hospital Unions and hospitals across the province requires hospitals to offer two types of exit packages to employees prior to issuing a notice of layoff:  a retirement allowance in article 9.08(B), and a voluntary exit option in article 9.08(C).  Each package is calculated on the basis of “two (2) weeks’ salary for each year of service.”

CUPE Local 1909 filed a grievance challenging the manner in which Ross Memorial Hospital calculated the packages for part-time employees. The Hospital started by calculating “years of service” by converting the hours worked by a part-time employee into the equivalent number of full-time years of service. The Hospital then looked at the average bi-weekly salary earned by the part-time employee to determine amount of the employee’s “two (2) weeks’ salary”.  It then multiplied the calculated years of full time service by the employee’s average bi-weekly salary to determine the quantum of the allowance.

The Union maintained that the Hospital’s method of calculation was illogical and improper, because it double-counted the part-time status of the employee. It made no sense, the Union argued, to convert a part-time employee’s service to the equivalent number of full-time years, but then use the employee’s bi-weekly part-time salary to calculate the benefit. This resulted in a “double discount” of the benefit for part-time employees. Either the salary also had to be converted to a full-time salary, or the years of service should not be converted into full-time hours.

The arbitrator’s decision

Arbitrator Gedalof found in favour of the Union.  In his view,  there was no reason to depart from the plain language of the collective agreement, which did not contemplate converting the employee’s calendar years of service to full-time hours for the purposes of exit packages:

There is no general provision for converting part-time years of service into a full-time equivalent, and there is no specific provision providing for the conversion in the context of the exit packages. Conversion is an issue that the parties explicitly addressed elsewhere in the agreement, and the parties chose to limit its application to specific provisions in the collective agreement, which do not include the conversion of service for the purpose of Articles 9.08(B) and (C)

In this light, I can only conclude that the parties intended the reference to years of service to mean the employee’s actual years of service, just as the reference to salary is a reference to actual salary. That is the plain and obvious meaning of the words that the parties have used …

The arbitrator refused to follow a 2013 award involving CUPE Local 1974 and Kingston General Hospital in which Arbitrator Steinberg found the same practice of calculating exit benefits to be reasonable. That award was upheld by the Divisional Court on judicial review.  However, Arbitrator Gedalof noted that the arbitrator’s decision had been made in the context of the parties agreeing that some kind of conversion was necessary. Neither party had argued in that arbitration for a plain language reading of “year of service”.  As for the judicial review, the court did not suggest that the interpretation adopted by the arbitrator in Kingston General Hospital was correct, or that it was the only or even the most reasonable of the alternative interpretations.

In the result, this decision means that the calculation of exit packages for part-time employees will fairly reflect their part-time status, and not apply a double discount that disproportionately devalues their service contribution.

Lawyers

Mark Wright, Mary-Elizabeth Dill

Practice Areas

Labour Law